Rating Agencies Follow Stablecoins: An Important Milestone in Industry Development

S&P Global Ratings recently turned its attention to the stablecoin market, conducting its first comprehensive assessment of 8 major stablecoins. This move not only signifies the importance of the cryptocurrency sector to traditional financial institutions but also indirectly indicates that stablecoins have become an indispensable part of the financial ecosystem.

As an institution known for assessing the stability of financial institutions and products, S&P's evaluation of stablecoins primarily focuses on their relative ability to be redeemed for one dollar. A senior analyst at the company stated that this move aims to reduce market information asymmetry and provide investors with more reference.

However, the assessment results are not optimistic. The largest stablecoin by market capitalization and trading volume, USDT, only received low scores within the 1 to 5 rating range. Similarly, some stablecoins that are quite popular in the decentralized finance space, such as DAI and TrueUSD, also failed to achieve ideal ratings.

Nevertheless, this report itself is a positive signal indicating that stablecoins have caught the attention of mainstream financial institutions. As stated by a co-founder of a venture capital firm, this is an important step towards the normalization of stablecoins, despite possible controversies regarding the assessment methods.

It is worth noting that S&P's assessment is not an endorsement or condemnation of any specific product. The company emphasizes that these ratings are forward-looking and aim to evaluate the likelihood of stablecoins maintaining their peg. At the same time, the assessment is based solely on publicly available data and has not involved direct communication with stablecoin issuers or the acquisition of internal information.

However, not all experts in the cryptocurrency field endorse this report. Some question whether traditional rating agencies truly understand this emerging field, while others believe that the core users of stablecoins may not care much about these ratings.

Regardless, this assessment by S&P is undoubtedly an important milestone in the development of stablecoins. It not only validates the significance of the stablecoin industry but may also have far-reaching implications for future trading and investment decisions, especially for publicly traded companies and institutions that need to be accountable for their decisions.